A Smart Alternative to Junk Bonds

High-yield bonds aren't the only way to get decent income these days. The stocks of "business-development companies" can offer better yields and lower risks.

For high investment yields that are worth the extra risk, look beyond junk bonds. Investors have piled into them, causing prices to rise and yields to fall to record lows. The BofA Merrill Lynch High Yield Master II index recently yielded just 5.7%.

Here's a better choice: a smaller, lesser-known investment class called business-development companies. Investors should stick with the safest ones, but even those yield about 8%. Go with...